The S&P 500 value has dipped over 10% in the past week, its highest weekly loss since the global financial crisis in 2008, raising huge concern across the financial world. Gold on the other hand is on a steady rise as an ounce of gold hit a nine-year high of $1,690 USD earlier in the week. While the former has presented unprecedented gains prior to the sharp fall over the week, the latter asset is continuing to make its case as the go-to store of value (SoV) for investors.
Metals massacred.
Gold -4%
Silver -6%
Platinum -6%
Palladium -11%
Equities down 1-3%.
In extreme circumstances, almost everything but treasuries gets dumped. Feels like 2008. pic.twitter.com/0oFiloHrrk
— Alex Kruger (@krugermacro) February 28, 2020
In any SoV discussion, Bitcoin (BTC) has become a common conversation and the recent volatile moves in BTC’s market is a factor that a number of analysts are debating. After briefly dropping below the $8,500 USD, questions were raised on BTC’s actual use as a store of value.
Stocks falling, where will the money move to?
Over the past, three month, the world has been fighting off the Corona Virus epidemic that has affected financial markets in equal proportion as the S&P 500 witnessed its lowest fall since the GFC in 2008. The stock market falling has seen a number of investors looking at alternative assets across the board with money flowing into gold and commodity markets.
All eyes were on the stock market this week with S&P500 experiencing its worst weekly drop since the GFC of 2008 – the year Bitcoin was created pic.twitter.com/SixUhr0X8A
— skew (@skewdotcom) February 28, 2020
One market that has not enjoyed any capital bumps is BTC’s market, which experienced over 10% in losses over the past week – lower than the S&P 500. Is BTC losing its sense of a store of value?
BTC keeps falling, still a safe haven?
Having lost close to $30 billion over the past week, is BTC volatile nature killing its prospects as a store of value? Probably not.
#Bitcoin hasn't been through a safe haven cycle yet. Equities have pretty much been in a bull market since the first block in Jan '09. Gold has been around for thousands of years, but you discount Bitcoin's SoV potential at your peril big time trader boy.
— Bitcoin il Duce ?????? (@iancbailey) February 28, 2020
Well, BTC may be entering its first ever bearish global trend as the stock market and commodities market experience the first ever drawdown since the global recession. Well, it has not started off so brightly in the days following the spread of corona virus to a number of countries but the long term prospects of BTC look healthy to provide safety for investors in times of economic repression.
